Nike Case Study

NIKE

Nike, originally known as Blue Ribbon Sports started off in 1962. At first the company sorely focused on manufacturing high quality running shoes for athletes. Philip Knight who was the founder believed in the idea that high quality shoes for runners can be provided at competitive prices if imported from abroad.

From the start, Nike believed in the “pyramid of influence” which is a marketing strategy used where the preferences of a few top athletes influences the products and the brand itself. Since the 90s Nike always had a top athlete as their spokesperson, starting with Runner Steve Prefontaine. Another instance where Nike’s marketing model helped them reach new heights was by signing Michael Jordan. This is however in 1985 when Jordan was just a rookie guard. Nike took the risk of signing a player as their spokesperson who still wasn’t a top player but their risks paid off as Jordan in the coming years became one of the best players in the history of basketball. Nike used this and started an Air Jordan line of basketball shoes, which made revenues hit over $100 million in the first year itself.

Nike’s marketing especially advertising department is one of the best in the sporting industry. It started off with the “ Just Do It” ad campaign. The advertisements were so motivational that audiences would get inspired after watching them. These ads were seen as a source of self-empowerment through sports and has since then been bolted as a part of Nike’s attitude.

Nike soon started expanding their activities into Europe. The company had a challenge in front of them as it was a different market as compared to the U.S and hence faced a cultural shock. From football to soccer were just a few adjustments that had to be implemented. It took time till Nike hit the ground running and this happen in 1994 when the Brazilian national team who were sponsored by Nike won the FIFA World Cup. Since then Nike is no long just a brand providing running shoes but a company who are a part of champion teams.

Nike then moved forward using soccer since the World Cup. They acquired Umbro, a British maker of soccer related products. After this acquisition, Nike’s presence in soccer was visible and felt around the world.

Nike’s marketing strategy of using top athletes since the 90s had paid off. High risks do yield high profits. Nike continued with this tactic and now they have all the top athletes of every sport signed up. Nike signed Tiger Woods, who since then has changed the way golfers dress. Other superstars Nike have signed are Sharapova, Nadal, Federer in tennis and Kobe, LeBron in basketball.

Nike’s marketing strategy has been about using superstars in order to promote the brand which was worked out really well for them. Using superstars as spokespersons is a perfect way to make people buy their products as everyone would want to own a pair of shoes or apparel that Nadal or lets say Federer wore during the Australian Open. It’s a smart way to make people know that the shoes those top athletes wear are available in the Nike store near them and they too could own them.

In 1962 though Philip Knight’s aim was to provide running shoes at prices that are affordable but in recent times it’s since that the shoes are overpriced and hence not every section of society can own a pair. It’s seen more as a luxury now. Even Nike’s partnership with Apple to start the Nike+ project is something that not everyone can afford cause one, a person will need to buy an apple product which are expensive and second, that same person will need to get a pair of Nike shoes that enables them to install the Nike tracking chip in the sole area. Hence this making it accessible to a limited market only.